Online retailers enjoyed a whopping increase in sales this holiday season when Canadians spent an estimated $1.6 billion on Internet purchases.

Research released Monday by polling firm Ipsos-Reid suggests that Canadians

spent significantly more online in Dec. 2001 than they did the previous year. In a poll of 2,000 people conducted online and over the phone, Ipsos-Reid calculates that online sales have increased 78 per cent over 2000’s holiday total of $650 million.

There’s a two or three per cent increase in the number of Canadian Internet shoppers each calendar quarter, which accounts for some of the increase in online holiday shopping, said Chris Ferneyhough, vice-president of Ipsos-Reid’s technology division, based in Toronto. But there’s also an increase in the number of purchases shoppers are making and how much they’re spending on each purchase.

One reason why more Canadians are punching in their credit card numbers online is the Internet is just a better place to surf than it used to be. Online retailers are presenting better and more sophisticated Web sites. “”Based on the feedback that we’ve got from online shoppers, they’re doing a better job,”” says Ferneyhough. “”When they say that they’re going to deliver something by a certain date, they are getting it there. The shoppers themselves are having an easier time finding what they’re looking for online. The whole experience has improved.””

The holiday traffic to‘s site increased 60 per cent in 2001 compared to the previous year, according to Future Shop Ltd. spokesperson Lori DeCou. The site is continually adding features to draw users in, she says. In 2001, the Burnaby, B.C.-based electronics retailer introduced a “”pricewatch”” section to its site to allow users to be notified if a certain product goes on sale or falls below a given price. In addition, the site moved its shipment cut-off from Dec. 17 to Dec. 20, updated product information on hot items like the Nintendo GameCube, and added customer product reviews.

“”They want to hear other people tell them about a product, not us,”” says DeCou. She adds that online traffic has also increased foot traffic into the store locations. Customers use the site for product information and price comparisons. Future Shop doesn’t break out sales for online versus in-store, but DeCou says that the retailer’s overall sales increased 21 per cent from Dec. 2000 to Dec. 2001.

Ferneyhough says he doubts the recent spike in online sales activity marks a return to the heady days of dot-commerce in the 1990s. Online retailers are just learning to make do with less. “”Leaner and meaner seems to be working,”” he says. “”There seemed to be a lot of bloated approaches prior to this. I’m sure there’s fewer employees (due to layoffs) but they seem to be doing a better job at getting a-hold of the online shopper.””

It doesn’t hurt that there are more online shoppers and their demographics are widening out beyond the young, well-educated male that dominated Internet transactions just a few years ago, he says. Men are still more likely to shop online than women, according to Ipsos-Reid, but there are more shoppers in the 18-34 and 55 and over categories. “”We find that as time goes by, it’s starting to reflect the general population more and more.””

Despite innovations, there is still room for improvement among Canadian Internet retailers, adds Ferneyhough. The Ipsos-Reid study states that 80 per cent of Canadian shoppers would rather buy from a homegrown site, but 66 per cent actually do. “”There’s still a bit of a gap there,”” he says. “”It’s difficult to say if the gap is there because there’s products that they can’t get from Canadian sites, or if it’s to save a couple of bucks.””

The Ipsos-Reid study was conducted from Dec. 10 to Jan. 7. With a 95 per cent certainty, the overall results carry an error rate of plus or minus 3.1 per cent. Ipsos-Reid estimates there are 14 million Internet users in Canada aged 18 or older.

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